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Two Billionaires Offer to Acquire the Tribune Company

The men interested in buying the Tribune Company: Ron Burkle, left, a grocery magnate, and Eli Broad, a real estate developer and civic leader.Credit
Left, Chester Higgins Jr./The New York Times; right, Jamie Rector for The New York Times

LOS ANGELES, Nov. 8 — Two Los Angeles billionaires, Eli Broad and Ronald W. Burkle, joined forces and submitted a competitive bid Wednesday to buy the Tribune Company, the owner of The Los Angeles Times and 10 other daily newspapers, according to people close to the investors. The company, which is based in Chicago, also owns more than two dozen television stations and the Chicago Cubs.

The news was the latest twist in a rapidly evolving situation involving the parent owner of one of the largest newspapers in the country. On Tuesday, the popular editor of The Los Angeles Times, Dean Baquet, was forced out of his job over his refusal to make further cuts to the newsroom staff.

The Times’s publisher, Jeffrey M. Johnson, was replaced by David D. Hiller in recent weeks because of similar tensions.

In an interview on Wednesday, Mr. Hiller said, “We’re trying to stay focused and encourage our people that the most important thing we have to do is to put out a terrific newspaper every day. It’s easier said than done because some of this stuff is distracting.” He said that there would be no more newsroom cuts before the end of the year, but that he would be looking to “find savings all across the company in the course of 2007.”

Both Mr. Broad, a real estate developer and civic leader, and Mr. Burkle, a grocery magnate who now runs Yucaipa, an investment firm for private and public retirement funds, had previously expressed interest in buying The Los Angeles Times from Tribune.

They, along with another local billionaire who is seeking to buy the paper, the Hollywood mogul David Geffen, have said that they wanted to do so to invest in a local institution, rather than exclusively as a means to financial gain.

The partnership between Mr. Burkle and Mr. Broad to buy the entire company was an unexpected turn. Both men declined to comment, as did a spokesman for Tribune.

Mr. Broad has met privately with a managing editor for The Times, Leo Wolinsky, as has Mr. Geffen. But journalists at The Times said on Wednesday that Mr. Broad had not been in touch with senior editors for many months. Mr. Broad had been seeking to buy the newspaper through his nonprofit entity, the Broad Foundation, according to people briefed on his thinking.

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Details of the bid were not immediately available, though recent offers by private equity companies for the Tribune Company, which has a market value of $7.7 billion, were said to be in the range of slightly above $30 a share. Those bids were rejected by the company as too low.

Shares of Tribune rose 86 cents, to $32.48 on Wednesday.

But the offer came as a surprise to a buffeted and demoralized Los Angeles Times newsroom on Wednesday. It was greeted as a hopeful sign when the word of an offer spread in the morning.

“Certainly after yesterday, any notion that we could be locally owned would be welcome, though that is tempered with concern over what that might bring,” said one senior member of the newsroom, who spoke on condition of anonymity because he feared for his job. “It’s a bit like a bolt out of the blue.”

Tribune executives said that the two billionaires had been in touch with the company about a possible bid for some time and that they understood that the company preferred to be sold in its entirety than to break up individual assets.

But the Tribune Company opened the door to offers on its individual assets after it said privately it was dissatisfied with the recent offers for the company from equity companies.

Some analysts were surprised at Wednesday’s bid, since the company had not provided bidders with a detailed look at its books. They suggested that the bidders might still be primarily interested in The Times and would sell off other parts if they ended up acquiring the Tribune Company.

“It seems more logical to assume their interests would be strictly in the local paper,” said James Goss, who follows the newspaper industry for Barrington Research, a Chicago investment firm. “Tribune would be a very complex company for someone not interested in all the parts."

Geraldine Fabrikant contributed reporting from New York.

A version of this article appears in print on , on Page C4 of the New York edition with the headline: Two Billionaires Offer to Acquire the Tribune Company. Order Reprints|Today's Paper|Subscribe